Tag Archives: Starhill Reit

M’sian property major sharpens S’pore thrust

Posted on 19 Nov 2009 | Comments Off on M’sian property major sharpens S’pore thrust

Starhill Global acquiring $571m of assets in big YTL revamp

YTL Corp, Malaysia’s biggest property group, is restructuring its RM8 billion (S$3.3 billion) property trust and hotel portfolio, which includes the Singapore-listed trust Starhill Global Reit.

Starhill Global Reit, which will focus on retail, will buy two malls in Kuala Lumpur from YTL’s Malaysia-listed trust Starhill Reit for $423.3 million.

The Singapore trust will also acquire the David Jones Building in Perth, Australia, for $148 million.

‘This exercise will restructure the RM8 billion in retail and hotel assets currently under our control into two distinct Reit portfolios – the hospitality Reit in Malaysia and the retail-centric Reit in Singapore, which will benefit both Reits in terms of pursuing growth and development strategies in a single, focused class of assets,’ said YTL managing director Francis Yeoh.

With the proposed acquisition of the three properties, Starhill Global Reit’s total portfolio size will grow to $2.5 billion. Its footprint will also be extended to Malaysia and Australia, diluting the geographic concentration risk. The trust’s portfolio now comprises 10 properties in Singapore, Japan and China valued at about $2 billion in total.

Starhill Global Reit also said in a separate announcement that it has terminated the master leases and property management agreements for seven properties in Japan to ‘mitigate tenant concentration risks’.

Dr Yeoh said that YTL’s long-term vision is for Starhill Global Reit to be the main YTL-linked vehicle for the ownership of prime retail and commercial properties.

On its part, Malaysia-listed Starhill Reit will instead focus on the hospitality business after selling the two malls. Hotel assets with the potential to be injected into the Reit include The Ritz-Carlton in Kuala Lumpur and The Majestic Malacca.

‘From the global standpoint, we see tremendous opportunities for Starhill Reit to acquire high-end assets in key international hot spots, including Bali, Saint Tropez, Phuket and other world-class destinations,’ said Dr Yeoh.

The two malls bought by Starhill Global Reit from Starhill Reit – Starhill Gallery and Lot 10 Shopping Centre – have a total net lettable area of 554,165 sq ft. They will be bought using an asset-backed securitisation structure.

Starhill Global Reit also said that Katagreen Development, a wholly-owned subsidiary of YTL Corp, will be the master lessee in both properties with a tenure. The master lease will incorporate a step-up rental feature every three years.

David Jones Building in Perth will be acquired from Centro, a real estate company based in Australia. David Jones, a department store, has a lease in the building until October 2032. It now occupies about 95 per cent of the total gross lettable area of the building and accounts for 75 per cent of the annual gross rental.

The proposed Australian acquisition is expected to be completed in January 2010 and will be funded by a combination of debt and proceeds raised from Starhill Global Reit’s recent rights issue.

Starhill Global Reit was formerly known as Macquarie Prime Reit, and was listed in 2005 with an initial portfolio that included stakes in Singapore malls Ngee Ann City and Wisma Atria.

The property trust’s name was then changed after YTL Corp in October 2008 took over the Macquarie Group’s 26 per cent stake in an all-cash deal worth $285 million.

YTL Corp has been expanding aggressively in Singapore. In 2008, it landed Singapore’s second largest generating company, the 3,100-megawatt PowerSeraya, for $3.8 billion.

Source : Business Times – 19 Nov 2009

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YTL revamps international property trust portfolio

Posted on 18 Nov 2009 | Comments Off on YTL revamps international property trust portfolio

YTL Corp., Malaysia’s biggest builder, said it will restructure its 8 billion-ringgit ($3.3 billion) property trust and hotel portfolio into distinct units ahead of acquisitions.

Its Singapore-listed Starhill Global REIT will become retail-centric, buying two Malaysian malls and the David Jones Building in Perth, Australia, while Kuala Lumpur-listed Starhill Real Estate Investment Trust will focus on the hotel and hospitality industry, YTL Chief Executive Officer Francis Yeoh told reporters in Kuala Lumpur today.

“This will benefit both REITs in terms of pursuing growth and development strategies in a single, focused class of assets,” Yeoh separately said in a statement.

The restructuring will see assets under the Singapore trust significantly grow, while those under its Malaysian counterpart will initially shrink before other YTL hotel assets are potentially injected.

The trusts have underperformed this year. Singapore’s Starhill Global REIT, previously known as Macquarie Prime Real Estate Investment Trust, has risen 39% this year compared with a 56% surge in the benchmark Straits Times Index. It currently owns two shopping malls in Singapore’s Orchard Road, plus seven properties in Tokyo and one in Chengdu, China.

The Singapore trust will pay 1.03 billion ringgit to buy Starhill Real Estate Investment Trust’s interests in Starhill Gallery and Lot 10 Shopping Centre in Kuala Lumpur, the statement said. It will also acquire the David Jones Building, one of just two retail pedestrian malls in Perth, from Centro Properties Group for $148 million, YTL said.

The purchases will increase the Singapore trust’s portfolio size to about $2.5 billion, the statement added.

Malaysian Trust

Malaysia’s Starhill Real Estate Investment Trust, which Yeoh told reporters may later be renamed YTL Hospitality REIT, has also underperformed this year, climbing 24% compared to a 45% rise in the main FTSE Bursa Malaysia KLCI Index.

After selling its interests in two malls, the Malaysian trust will be left with just two assets in its portfolio, the J.W. Marriott Hotel Kuala Lumpur and some serviced apartments, shopping and parking space within the Residences at the Ritz- Carlton, Kuala Lumpur.

The disposals will “provide yield accretive returns to Starhill REIT’s unitholders,” the statement said.

YTL may inject some of its other hotel assets into this Malaysian trust, including its Pangkor Laut, Tanjong Jara and Cameron Highlands resorts, along with The Ritz-Carlton, Kuala Lumpur hotel and remaining parts of The Residences. Some of the company’s heritage hotels including The Majestic Malacca and business hotels such as the Vistina chain may also be injected, Yeoh said in the statement.

“From a global standpoint, we see tremendous opportunities for Starhill REIT to acquire high-end assets in key international hot-spots, including Bali, Saint Tropez, Phuket,” he added.

Source : The Edge – 18 Nov 2009

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